Hi all, I'm debating whether to break my fixed term mortgage which has still got 3 years left to run and take the hit of the break fees. Would these fees be tax deductible? If I increased the value of the mortgage to cover the fee – would the whole mortgage remain fully tax deductible?
Thanks for any advice
I beleive so. You can claim loan fees over 5 years or the term of the loan if it is shorter. If you borrow to pay for fees related to an investment loan it should be deductible.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Hi,
They are a cost incurred in earning assessable income, so I should think so.
More info can be found at:
http://www.ato.gov.au/individuals/content.asp?doc=/content/00113245.htmIf loan establishment fees can be claimed, then surely break fees could also.
Check with your accountant though.
– Steve
Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
Yes, I believe you will find they are, just like the loan establishment fees. (And FYI LMI is deductable over 5 years or the loan term, whichever is less) Just out of interest, before you break, assume they are, and then do the sums and see if it will save you what you hope – remembering you will need to factor in variable rates rising too. If you check out the current fixed rates many lenders are offering now, they are probably not a lot less than what your's is now (unless you locked it in when rates where hi 8's/low 9's%), which give you an idea about where the varaible rates may end up in the next couple of years.
All the best.
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